Permira deinvests yet again from Hugo Boss

Thursday, 29 May 2014
SVG Capital PLC Wednesday said the value of its holding in Hugo Boss is 322.5 million pounds, after Red&Black Lux S.à r.l., which is controlled by Permira IV Funds, realised a 6 percent stake in the fashion retailer. Shares in German fashion house Hugo Boss fell 3 percent in early trades Wednesday after main shareholder Permira said it will place a 5.6 percent stake, or up to 3.96 million shares. Morgan Stanley organised the accelerated book building process.

The buyout firm had placed the shares at 101.50 euros apiece, obtaining proceeds of slightly over 400 million euros, according to a source familiar with the transaction quoted by Reuters. That compares with Tuesday's closing price of 105.80 euros.

Permira keeps slimming down its presence in Hugo Boss

Permira has steadily been selling off its stake in Hugo Boss, but even after the sale it will still hold around 50 percent. "One could have expected a bigger placement," said a Frankfurt-based trader in an interview with Reuters. "The share price weakness may be short-lived."

On March 31, 2014, SVG Capital's holding in Hugo Boss was valued at 303.2 million pounds. In a statement, SVG Capital said the proceeds of the partial realisation will be used to repay debt at the holding company level.

Red & Black now has a 51 percent stake in Hugo Boss and has said it won't sell any further shares for three months.

On the wake of the news, the stock edged lower in early trading on Wednesday, falling by 2.8 percent, the biggest decliner on the FTSEurofirst 300 index of top European shares.

Hugo Boss said in a statement late on Tuesday that an investment company controlled by Permira is placing up to 3.96 million Hugo Boss shares in an accelerated book building process. As a result of the placement, the free float of Hugo Boss AG will increase to around 48 percent of the share capital, highlighted various analysts that closely follow the stock.

Permira, which owns the Hugo Boss stake via its Red & Black investment vehicle, last sold off shares in May 2013 and November 2011, when it reduced its stake by 10 percent and 6.4 percent respectively. At the time, the stock dived by over 6 percent.

Hugo Boss was bought by Permira for 4.3 billion pounds in 2007, and following consensus market valuation, would be now worth circa 5.8 billion pounds.

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